Question 1

Free trade as a government policy was first officially embraced by Germany in 1846, when the Bundestag repealed the Corn Laws.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following multilateral agreements was established under U.S. leadership in 1947, with the objective to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like?

Accepted Answer

A)  General Agreement of Tariffs and Trade (GATT) 
B)  North American Free Trade Agreement (NAFT
A)  
C)  Central American Free Trade Agreement (CAFT
A)  
D)  Free Trade Areas of the Americas (FTA
A)  
E)  North Atlantic Treaty Organization (NATO)

Question 3

Import tariffs protect domestic producers against foreign competitors.

Accepted Answer

A) True 
 B)False

Question 4

The country of Cadmia, which is a leading producer of bauxite, had to impose trade sanctions on Cerian soda cans in order to get the government of Ceria to enforce export restraints. This imposition by Cadmian government was undertaken to protect domestic producers of soda cans. Which of the following government intervention is being used by Cadmia?

Accepted Answer

A)  Diversification
B)  Deregulation
C)  Retaliation
D)  Liberalization
E)  Monopolization

Question 5

Which of the following best indicates the motive for foreign firms to engage in dumping?

Accepted Answer

A)  Unloading excess production in foreign markets
B)  Cutting labor costs to reduce the costs of production
C)  Providing a wider range of products for consumers in foreign markets
D)  Meeting the voluntary export requirements imposed on it
E)  Obtaining subsidies from the importing country

Question 6

What are the issues that are at the forefront of the current agenda of the WTO?

Accepted Answer

Four issues at the forefront of the curr...

Question 7

The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment, something the GATT had never done. Two of the first industries targeted for this reform were:

Accepted Answer

A)  global telecommunication and financial services industries.
B)  scientific research and defense sector.
C)  pharmaceuticals and heavy metal industry.
D)  pharmaceuticals and biotechnology.
E)  scientific research and global telecommunication.

Question 8

Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors.

Accepted Answer

A) True 
 B)False

Question 9

The main gains from subsidies accrue to importers, whose international competitiveness is increased as a result of these subsidies.

Accepted Answer

A) True 
 B)False

Question 10

A government should use subsidies to support promising firms that are active in newly emerging industries, according to:

Accepted Answer

A)  strategic trade policy.
B)  public policy.
C)  absolute advantage.
D)  product life-cycle.
E)  industrialization.

Question 11

Which of the following specifies that U.S. government agencies must give preference to U.S. products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage?

Accepted Answer

A)  Export Administration Act
B)  Helms-Burton Act
C)  Hawley-Burton Act
D)  Buy America Act
E)  Volcker Rule

Question 12

Pressures for greater protectionism increased around the world during the 1980s and early 1990s due to the strain caused by the persistent trade deficit in the world's largest economy, Japan.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

Accepted Answer

A)  The slackness of enforcement agencies
B)  WTO's noncommittal approach to antidumping laws
C)  Bilateral VERs which subvert antidumping laws
D)  The rather vague definition of what constitutes "dumping"
E)  Lack of consensus among member nations

Question 14

Explain with an example the administrative trade policies used by governments in addition to the formal instruments of trade policy.

Accepted Answer

In addition to the formal instruments of...

Question 15

Myra is a firm producing premium handbags for women. These bags are manufactured and patented in the country of Ceria. Manufacturers in the country of Argonia create counterfeit Myra bags and sell them in the local markets of Argonia. These bags are sold at almost similar prices to the original in other countries. Which of the following is likely to happen?

Accepted Answer

A)  Expansion of world market for Cerian products
B)  Reduction in the export opportunities for Myra's hand bags in Argonia
C)  Reduction in import of all Argonian goods
D)  Increase in the prices of handbags produced by Myra in Argonia
E)  Reduction in opportunities of export from Argonia to other countries

Question 16

According to Paul Krugman, a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry, is most likely to:

Accepted Answer

A)  dominate the industry.
B)  move away from protectionism.
C)  provoke retaliation.
D)  incur huge financial debts.
E)  upset the special-interest groups within the economy.

Question 17

Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Accepted Answer

Under U.S. leadership, the GATT was esta...

Question 18

What conclusions can be derived from economic analysis of the effect of import tariffs?

Accepted Answer

In general, two conclusions can be deriv...

Question 19

Dumping involves foreign producers:

Accepted Answer

A)  attempting hostile takeovers of domestic firms and usurping the available resources for production.
B)  indiscriminately exploiting the natural resources of a foreign country to create a later demand that can be met only by imports.
C)  eliminating competition by subsidizing prices in a foreign market with home market profits and eventually raising prices to earn substantial profits.
D)  capturing the niche market rather than the masses.
E)  exporting only a small quantity of their products into an importing country.

Question 20

The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs, subsidies, and import quotas.

Accepted Answer

A) True 
 B)False

Exam 7: Government Policy and International Trade

Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Correct Answer
verified
Under U.S. leadership, the GATT was esta...
View Answer

What are the issues that are at the forefront of the current agenda of the WTO?

Correct Answer
verified
Four issues at the forefront of the curr...
View Answer

Pressures for greater protectionism increased around the world during the 1980s and early 1990s due to the strain caused by the persistent trade deficit in the world's largest economy, Japan.

Correct Answer
verified

The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment, something the GATT had never done. Two of the first industries targeted for this reform were:

Correct Answer
verified

The main gains from subsidies accrue to importers, whose international competitiveness is increased as a result of these subsidies.

Correct Answer
verified

According to Paul Krugman, a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry, is most likely to:

Correct Answer
verified

Dumping involves foreign producers:

Correct Answer
verified

Which of the following multilateral agreements was established under U.S. leadership in 1947, with the objective to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like?

Correct Answer
verified

Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors.

Correct Answer
verified

Which of the following specifies that U.S. government agencies must give preference to U.S. products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage?

Correct Answer
verified

Free trade as a government policy was first officially embraced by Germany in 1846, when the Bundestag repealed the Corn Laws.

Correct Answer
verified

Which of the following best indicates the motive for foreign firms to engage in dumping?

Correct Answer
verified

Correct Answer
verified

Explain with an example the administrative trade policies used by governments in addition to the formal instruments of trade policy.

Correct Answer
verified
In addition to the formal instruments of...
View Answer

Import tariffs protect domestic producers against foreign competitors.

Correct Answer
verified

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

Correct Answer
verified

A government should use subsidies to support promising firms that are active in newly emerging industries, according to:

Correct Answer
verified

Correct Answer
verified

The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs, subsidies, and import quotas.

Correct Answer
verified

What conclusions can be derived from economic analysis of the effect of import tariffs?

Correct Answer
verified
In general, two conclusions can be deriv...
View Answer

Exam 7: Government Policy and International Trade

Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Correct AnswerverifiedUnder U.S. leadership, the GATT was esta...View AnswerShow Answer

What are the issues that are at the forefront of the current agenda of the WTO?

Correct AnswerverifiedFour issues at the forefront of the curr...View AnswerShow Answer

Pressures for greater protectionism increased around the world during the 1980s and early 1990s due to the strain caused by the persistent trade deficit in the world's largest economy, Japan.

Correct AnswerverifiedShow Answer

The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment, something the GATT had never done. Two of the first industries targeted for this reform were:

Correct AnswerverifiedShow Answer

The main gains from subsidies accrue to importers, whose international competitiveness is increased as a result of these subsidies.

Correct AnswerverifiedShow Answer

According to Paul Krugman, a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry, is most likely to:

Correct AnswerverifiedShow Answer

Dumping involves foreign producers:

Correct AnswerverifiedShow Answer

Which of the following multilateral agreements was established under U.S. leadership in 1947, with the objective to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like?

Correct AnswerverifiedShow Answer

Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors.

Correct AnswerverifiedShow Answer

Which of the following specifies that U.S. government agencies must give preference to U.S. products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage?

Correct AnswerverifiedShow Answer

Free trade as a government policy was first officially embraced by Germany in 1846, when the Bundestag repealed the Corn Laws.

Correct AnswerverifiedShow Answer

Which of the following best indicates the motive for foreign firms to engage in dumping?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Explain with an example the administrative trade policies used by governments in addition to the formal instruments of trade policy.

Correct AnswerverifiedIn addition to the formal instruments of...View AnswerShow Answer

Import tariffs protect domestic producers against foreign competitors.

Correct AnswerverifiedShow Answer

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

Correct AnswerverifiedShow Answer

A government should use subsidies to support promising firms that are active in newly emerging industries, according to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs, subsidies, and import quotas.

Correct AnswerverifiedShow Answer

What conclusions can be derived from economic analysis of the effect of import tariffs?

Correct AnswerverifiedIn general, two conclusions can be deriv...View AnswerShow Answer

Correct Answer
verified
Under U.S. leadership, the GATT was esta...
View Answer

Correct Answer
verified
Four issues at the forefront of the curr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In addition to the formal instruments of...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In general, two conclusions can be deriv...
View Answer